Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I present the report of the Rural and Regional Affairs and Transport References Committee on Qantas jobs, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

by leave—I move:

That the Senate take note of the report.

We have seen a fair bit of unhealthy activity within our aviation industry in Australia in the last few months. I want to allude to some alarming figures. On 27 February of this year Qantas Airways Limited announced an underlying loss of no less than $252 million before tax and a statutory loss after tax of $235 million for the six months ending 31 December 2013. You would have to be living under a rock not to know that lately there is absolute turmoil within Qantas Airways, and I think I am free to say that.

We saw an extreme situation a couple of years ago, when I was at the Qantas AGM in Sydney, when the board, the CEO and the chairman all awarded themselves significant pay rises on the Friday afternoon, and then about 27 hours later the CEO came out, with the endorsement of the chairman, with a notification that he would ground our national carrier 48 hours later because of the threat of Qantas pilots wearing red ties. It was absolute union turmoil, and how dare the Transport Workers Union have two 20-minute stoppages, or something like that. Since then the cost to the nation cannot be measured by that irresponsible activity from Mr Joyce, ably supported by Mr Leigh Clifford, the chairman, and by all the board members, who in my humble opinion were absolutely guilty of that same crime upon our nation.

To think that people, who were heading for funerals, weddings and significant events around the country, were grounded with absolutely no forewarning. To think that people in the United States were leaving LAX, were pushed out—and this was reported by the pilots—off the air bridge and all of a sudden were returned with no notification, unloaded off the plane and told, 'Sorry, you're not going back to Australia. We don't know how long this is going to last.' Anyway, we have had Mr Alan Joyce from Qantas Airways storm-trooping the hallways of this fantastic building, snivelling up to members of the opposition and wanting all the help from the government to pull him out of the mire because of some absolutely disgraceful business decisions taken by him and the board.

Time does not permit me to go into how I really feel. The committee had a hearing, which was held in Sydney, and had representation from a number of people. Mr Joyce from Qantas Airways and Mr Gareth Evans, the CFO from Qantas Airways were there. There was representation from Miss Linda White, Assistant National Secretary of the Australian Services Union, whose members are absolutely panicking because they do not know if their jobs are going. We also had Mr Tony Sheldon from the TWU as well as others. What I have to absolutely focus on is that Qantas's answer to the mire they have put this company in, to drive the shares through the floor, to put absolute fear into the hearts of the workers, was to announce the loss of 5,000 Australian jobs. But, wait, there is more. When I asked Mr Joyce at the hearing, 'Could you guarantee that there would be no more jobs lost, Mr Joyce, Australian jobs, to offshore, or overseas, or to making full-time employees part-time?' he could give me no guarantee. He could give the committee absolutely no guarantee.

Madam Acting Deputy President Boyce, time is against me. I want to thank the submitters, I want to thank the senators who were with me on that day of the hearing and who ably supported our inquiry. I also want to thank those who appeared before us. I want to take this opportunity to thank the Secretary of the Rural and Regional Affairs and Transport Committee, Mr Tim Watling, ably backed up by his crew and their fantastic work. I will have a lot more to say on this. I will have a lot more to say on Qantas. I will have a lot more to say about my thoughts on the management of Qantas Airways over the last five or seven years.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Twenty-two years ago the Qantas Sale Act came into effect. In 1995, three years later, the first airline ticket was sold via the internet. In 1997-98 was the Asian financial crisis. In 1998 Qantas co-founded the Oneworld Alliance. In 1999 we saw the first web based passenger check in and online boarding passes. In the 2000s was the rise of Emirates. In 2001 was the September 11 terrorist attacks. The domestic competitor to Qantas, Ansett, collapsed two days after the terrorist attacks in New York. In 2003 was the establishment of Jetstar. In 2004 there was Jetstar Asia. In 2006 Qantas was subject to a failed bid from a consortium of Airline Partners Australia. In 2006 was avian flu. In 2007 was the impact of the high Australian dollar resulting in cheaper international airfares. In 2008-10 there was the recession, the GFC, which was blamed for all of our woes. In 2008 all the prices rise above $1.45.

My point is that 22 years ago was before the internet. That year, 1992, was not long after this building was opened. The whole point is that was this inquiry of the Rural and Regional Affairs and Transport References Committee was a circus. It was staged to provide a forum for the unions to have a crack at the individuals that run the Qantas company.

In 1992, under Labor, Mr Keating privatised Qantas. But back then he could not get the agreement of his keepers—those who are still trying to flex their muscles here in 2014 by sending the opposition in to try and represent the unionised interests. They have put this together. Qantas operates in an outdated environment.

Yesterday I heard, in chatter, that Virgin operates a service now double the size of Ansett for 30 per cent less operating costs than Ansett did in its final years. That is because has not been made moribund by union agreements. I have heard that the pilots' agreement with Qantas is 500 pages long and the agreement with Virgin is 50 pages. The Qantas agreement is not sustainable.

I am concerned about the 27,000 jobs that remain at Qantas. I am concerned about keeping those. The people on the other side of the chamber talk about the 5,000 jobs that have been lost. That is tragic. That is not what we want to see. But we do not want to see the demise of an airline because it cannot modernise. The government should not have any say in how that business runs itself. We made that decision in 1992 when we privatised Qantas. It is not our company. I urge all senators in this place to get behind this bill so that this company can flourish with out the impediment of politicians playing around with it for their own gain.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I just want to address two of the recommendations of the report. One is that the government should provide a debt guarantee, but the first recommendation is:

The committee recommends that paragraphs 7(1)(aa) and 7(1)(b) of the Qantas Sale Act 1992 be repealed while leaving the remainder of Part 3 of the Qantas Sale Act 1992 intact …

So there were two very simple recommendations that came out of this references committee. Quite contrary to the scurrilous allegations of the intent of this committee's deliberations.

In the short time I have I want to say why we should have a debt guarantee. We should have a debt guarantee because of the size of the contribution our airlines make—both in numerical employment terms and in dollars—to the Australian economy. Some figures that were put before this inquiry—Senator Edwards would know about this if he had bothered to read it—show that this sector contributes about 6.1 per cent of GDP: $75.6 billion. That is on 2011 figures.

There are 149,000 jobs directly supported by the aviation sector and 97,000 jobs indirectly supported by the aviation supply chain. There are 65,000 jobs supported by the spending of the employees of the aviation sector and its supply chain. In addition, there are nearly half a million people connected with this sector in the tourism industry. So it is a big chunk of our economy. The ACTU put it very succinctly: we are an island; we can't drive to another country. Qantas carry 50 million passengers a year. Virgin carry 28 million passengers a year. That is nearly 80 million passengers travelling on an airline. This government must make sure that its citizens can travel freely, with ease, at a respectable price and safely. Qantas and Virgin allow that to happen, but Qantas has come to the government on repeated occasions crying about foreign investment for foreign airlines.

Let's have a think about the last time that a foreign airline invested in Australian airlines—I am talking generically. It was Air New Zealand investing in Ansett. Air New Zealand dropped into Ansett and, on a particular day—Thursday, 30 September 2001—the owner of Ansett airlines announced the write-off of Ansett's book to the value of a dollar. And up to 15,000 people lost their jobs.

That is why this government should look at a debt guarantee. Lo and behold, what happened two days after Ansett collapsed, when there was a dire situation and the citizens of the country could not travel freely? Two days after the Ansett failure the Minister for Workplace Relations, the Hon. Tony Abbott announced a proposal for a levy of $10 on each air ticket purchased in Australia.

My point is simply that the government cannot walk away from this and say that it is just private sector business. The citizens of this country need to be able to travel freely and safely. In the event of that corporate collapse this Howard government minister, the Hon. Tony Abbott, intervened and whacked on a levy for three years—simply to redress the situation that occurred as a result of failing to act.

The Hon. John Anderson, when approached by Qantas, picked a winner. He backed Qantas and Ansett fell over. It is always the government's responsibility to make sure that we can move around this country freely, safely and efficiently. It was always this government's responsibility to make sure that we maximise employment opportunities for ordinary Australians. This is a vital sector. A debt guarantee would do one very good thing for Qantas; it would back them up and give them a better credit rating. It would allow them to become more competitive on their international routes, where they are operating 1963 technology. They need 787s, and they need them now, but they have deferred that order.

It would bring them back into play. That would allow our airline to be what it is colloquially known as—an Australian airline: Qantas. We would have our people looking at new aircraft instead of old 747s. We would be travelling on new planes. The passenger numbers and profitability would pick up.

My argument is that, if you are not proactive, you will have to be reactive. When 27 million passengers are travelling on Jetstar and 23 million passengers are travelling on Qantas, when the age of Jetstar aircraft is, on average, 5.2 years and the age of Qantas aircraft is 9.8 years, I think the case is well made. I do not support the current management of Qantas, but I support the survival of a great Australian icon which has pulled this country out of problems since World War II. There have been ample situations where Qantas has simply done the right thing. Qantas evacuated people from Darwin—700 people on a 747—people from Fiji and people from bushfires. This airline always comes to the fore.

We need nothing more to remind us than the tragedy that is unfolding with Malaysia Airlines. People of a nation look to their airline, they want it to be supported by their government and run properly, and a debt guarantee would be a dab good idea.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I have one minute and 30 seconds, and Senator Xenophon also wants to speak on this. Unfortunately, the arrangement was not kept. I simply say this: Qantas needs to be able to run its own business in an appropriate way, in the same way as its competitor Virgin. They do not want a debt guarantee, they do not want another thing that—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

They did in November and December.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

Well, they do not want it now. If the Labor Party are concerned about the finances of Qantas, one way they can fix it is by getting rid of the $120 million carbon tax that is imposed. We want safe airlines in Australia. We believe that the way Virgin operates is safe. You would think from reading some of the union submissions that the old white Australia policy is back: Australian workers good, Asian workers bad when it comes to servicing aircraft. I reject that completely.

We need to get out of the hair of these international companies. To think that any politician—Labor, Greens or even us—should be there to try to tell respected, intelligent and competent businesspeople how to run their airlines is an absolute farce. We should be doing what Qantas are asking for: putting them on an equal footing with Virgin.

I want to seek leave to continue my remarks. I apologise to Senator Xenophon. He has an interest in this and will not get an opportunity to speak. As the last speaker, I seek leave to continue my remarks.

Leave granted.